The credit crunch claimed a new victim yesterday as Vodafone revealed its UK profits had plunged 45 per cent.

Despite signing up an extra 207,000 customers, the mobile giant made just £134million in the half-year to October, down from £243m in the same period last year.

Group profits tumbled by a quarter to £3.3billion despite booming business in India.

New boss Vittorio Colao reacted by unveiling plans to slash £1bn off Vodafone's costs by 2011 through cutting spending in all areas.

It will also mean job cuts at the group, which employs 80,000, including 10,000 in the UK. The move shocked an industry previously expected to escape the credit crunch.

Colao signalled the cutbacks after warning revenue for the year to April 2009 could be £1bn lower than previously forecast.

He said Vodafone would now focus on squeezing more money out of existing customers rather than chasing new ones.

It may launch a scheme which is already a hit in Germany, offering better deals if several members of a family sign up.

Colao calls this his "Nirvana" as it makes customers less likely to switch to rivals networks.

It will also offer users bigger bundles of minutes and texts if they upgrade their handset less often. Vodafone also hopes to persuade more customers to use services such as mobile internet.

But experts believe this could prove tricky due to the worldwide economic slowdown.

In the UK, contract customers, who make up almost 60 per cent of Vodafone's 18.7 million subscribers, have already cut their spending. A year ago bills averaged £45.80 a month but that has fallen to £40.50.

Colao says fierce competition means customers are getting more for their money, including the cheapest mobile broadband in Europe.

Despite a £1.7bn hit in Turkey, the figures were not as bad as some City analysts had feared and the share price jumped almost seven per cent.